July 06, 2013

Seeing Through The Glass Darkly... Grumping about the Economy

6 “You have sown much, and bring in little; You eat, but do not have enough;

You drink, but you are not filled with drink; You clothe yourselves, but no one is warm;

And he who earns wages, Earns wages to put into a bag with holes.”

It's an interesting phenomenon. The news has recently reported that a few more jobs have been "created" [NY Times article HERE] but that this is viewed with "concern" because it might mean the "Fed" would raise interest rates.

Let me get this straight. Things would be better if more people were employed... right? But if we hire people then interest rates go up.... right? Now, those interest rates are set by the Fed. Reserve Board, which are a bunch of people who have the job of setting interest rates... right? So, what "requires" them to raise interest rates? Is someone holding a gun to their head? Is it the latest version of "Murphy's Law"? If interest rates go up, doesn't that make the price of doing business higher? Wouldn't that mean that employers would stop hiring people?

Oh, good grief. Isn't it about time that someone, somewhere, at a very high level, came right out and said the obvious. "Managing the Economy" is an exercise in illusion. The only difference between what's happening when those very rich people at the top make such decisions and what happens in a vaudeville magician's act is that both the audience and the performer know that it's not really magic.

Interest rates were near zero for months... does anyone really believe that the recent slight increase in employment resulted from that fact? It's all smoke and mirrors. "Group Think" is what drives the stock market up and down, although they speak of it as "confidence" or lack thereof.

The bottom line (pun intended) is that the economy, just as with virtually every other human social condition, reflects the underlying spiritual values and outlook of the people.

In Haggai's day this was more readily understood than now. A man could strew seeds in great abundance in a field and yet reap very little. Or, at another time, he could sew only a few and have an abundant harvest. There are times when drink is plentiful but the people are never "filled", they remain restless and screaming for more. There are other times when the people consider themselves blessed beyond measure when their needs are met but with very little more. There are times when a man works his hand to the bone making extra money only to discover that he has not improved his relative fortune at all. At other times a man finds that a man's expectations are entirely consistent with his income and he is relatively content.

All this is to say that it is the national "spirit", however one defines it, that ultimately determines how the economy is viewed. It's a question of life-styles and "expectations" and that which meets some arbitrary criterion of "prosperity."

If there are any laws of economics, and I am dubious of them all, it is that "in some circumstances certain policies work and in others they don't." I am reminded of the 1930's when the US languished behind Germany and other modern European nations in recovery from the Great Depression. Was it the policies of the Post-Weimar Republic Germany that pushed it to near total employment and public euphoria, or was it that the national mood simply changed? The same can be said of Italy and Great Britain.

I do not believe that the Scriptures mandate any particular form of "economic strategy." There are some "economic" principles that are addressed under the heading of "justice." A worker should be free to contract his labor for a negotiated price and once that labor is accomplished he is "worth his hire" and must not be deprived of his wages. There is "public" and "private" property and each should be respected within its domain. The magistrate has no absolute right to coerce "private" property from the citizens. The Scriptures do not mandate a fixed currency or a floating one.

What the Scriptures teach, fundamentally, is that God is ultimately in control of prosperity or the lack thereof and that it is the prevailing attitude and priorities of the people that He tends to reward or inhibit. In Haggai's time, God was acting to hold back the economy because the people lacked a "higher" vision than their own immediate comfort (houses) or prestige. They did not care about the "Lord's House" which was their unifying symbol and idea. Therefore they were fragmented and ineffective.

I can't think of a closer analogy to the situation today.

It's time to do away with the smoke and mirrors. Not everyone is guaranteed or should be guaranteed a high level of prosperity. The fact (not as much now as before) that people are pouring over our borders in order to find "jobs" should tell us that the issue is not "jobs" but "jobs that people are willing to accept." A similar situation is present in the current sphere of higher education. People are concerned about paying back college loans because of the ruinous cost of tuition. Why is tuition so high? Because government backed student loans are being thrown around left and right. Is this not a case of "earning wages to put into a bag full of holes?" And for those 50% or so of students who take out college loans and actually finish their degree, they discover that there are few, if any, jobs that will pay them what they expected to be paid.

These reflect a fundamentally moral issue not an economic one. Don't buy a lottery ticket with borrowed money. The same goes for college education, stock, etc. Our ethic should be to live within our means even if those means are far less than what we one day hope they will be. To embark upon such a life of self-sacrifice one must be motivated toward a higher ideal.

Christians have that ideal right before their eyes. It is the Kingdom of God. Non-Christians, if things are to turn around in the broader society, will have to be motivated toward some other transcendent value. I am not sure that Nationalism will work anymore, but if some such higher value is not found, then we, as a nation, will continue to languish, decline, and one day the illusion will no longer be sustainable.